... btw, I forgot to mention that I don't see any problem with the patch's behavior for DEFAULT. What I see with both readline and libedit is that if you type something reasonable, like set timezone to d<TAB> then it will correctly complete "efault ", without any extra quotes. Now, if you're silly and do set timezone to 'd<TAB> then readline gives you "efault' " and libedit gives you nothing. But I think that's your own, um, fault. We don't have any other places where tab completion is so aggressive as to remove quotes from a keyword.
regards, tom lane